Financial Contrast: Helmerich & Payne (HP) and Advantage Oil & Gas (AAV)

Helmerich & Payne (NYSE: HP) and Advantage Oil & Gas (NYSE:AAV) are both oils/energy companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Analyst Recommendations

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This is a summary of current ratings and price targets for Helmerich & Payne and Advantage Oil & Gas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Helmerich & Payne 5 15 6 0 2.04
Advantage Oil & Gas 0 2 2 0 2.50

Helmerich & Payne presently has a consensus price target of $56.61, indicating a potential downside of 21.93%. Advantage Oil & Gas has a consensus price target of $10.17, indicating a potential upside of 203.48%. Given Advantage Oil & Gas’ stronger consensus rating and higher possible upside, analysts clearly believe Advantage Oil & Gas is more favorable than Helmerich & Payne.

Dividends

Helmerich & Payne pays an annual dividend of $2.80 per share and has a dividend yield of 3.9%. Advantage Oil & Gas does not pay a dividend. Helmerich & Payne pays out -220.5% of its earnings in the form of a dividend. Helmerich & Payne has increased its dividend for 45 consecutive years.

Valuation and Earnings

This table compares Helmerich & Payne and Advantage Oil & Gas’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Helmerich & Payne $1.80 billion 4.37 -$128.21 million ($1.27) -57.09
Advantage Oil & Gas $173.78 million 3.59 $73.31 million $0.20 16.75

Advantage Oil & Gas has lower revenue, but higher earnings than Helmerich & Payne. Helmerich & Payne is trading at a lower price-to-earnings ratio than Advantage Oil & Gas, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

62.0% of Advantage Oil & Gas shares are held by institutional investors. 4.1% of Helmerich & Payne shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Helmerich & Payne and Advantage Oil & Gas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Helmerich & Payne 20.30% -1.90% -1.27%
Advantage Oil & Gas 39.22% 2.98% 2.39%

Volatility and Risk

Helmerich & Payne has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500. Comparatively, Advantage Oil & Gas has a beta of 0.64, meaning that its stock price is 36% less volatile than the S&P 500.

Summary

Advantage Oil & Gas beats Helmerich & Payne on 9 of the 17 factors compared between the two stocks.

About Helmerich & Payne

Helmerich & Payne, Inc. is engaged in contract drilling of oil and gas wells for others. The Company operates in the contract drilling industry. The Company’s contract drilling business consists of three segments: U.S. Land, Offshore and International Land. The Company is also engaged in the ownership, development and operation of commercial real estate and the research and development of rotary steerable technology. Its real estate investments are located within Tulsa, Oklahoma, and include a shopping center containing approximately 441,000 leasable square feet, multi-tenant industrial warehouse properties containing approximately one million leasable square feet and approximately 210 acres of undeveloped real estate. The Company provides drilling rigs, equipment, personnel and camps on a contract basis. The Company’s subsidiaries include Helmerich & Payne International Drilling Co. and Helmerich & Payne de Venezuela, C.A.

About Advantage Oil & Gas

Advantage Oil & Gas Ltd., together with its subsidiaries, acquires, exploits, develops, and produces natural gas in the Province of Alberta, Canada. The company primarily focuses on the development and delineation of its Montney natural gas and liquids resource that includes 200 net sections of land in Glacier, Alberta. It provides natural gas and natural gas liquids primarily through marketing companies. The company was founded in 2001 and is headquartered in Calgary, Canada.

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